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Energy Price To Rise 3 Times In 10 Years

Transparency, Efficiency & Subsidy are the key

EB Report

It’s a known fact that, the energy prices will rise after the import of Liquefied Natural Gas (LNG) in fact, it might rise up to three folds in the next 10 years. However, the prices can be kept within the limit of the mass people by increasing efficiency of the whole energy sector. Subsidies must be provided for the mass people even after fixing the energy price on the basis of the market value otherwise it might impose a bad impact on the overall economy of the country.

Speakers said so at a seminar on ‘Energy Tariff and National Economy’ was organized by the Forum for Energy Reporters Bangladesh (FERB) at the Biduyt Bhaban on Saturday in the city. Chairman of FERB Arun Karmaker chaired the seminar while Executive Director Sadrul Hasan made the welcome address.

The speakers of the said energy prices must be fixed in a transparent manner. The price of one energy type should not be controlled or adjusted by the price of another one. Integrated plans are needed to govern the sector.
Addressing as the chief guest at the seminar the State Minister for Power, Energy and Mineral Resources Nasrul Hamid said that, the government would supply electricity to all citizens (100%) by 2018. But it might take more time to supply uninterrupted or quality power to all. However, subsidies will be continued to meet the people’s demand, he added.

He said the government is importing LNG and initiatives are already taken to rebate VAT and tax on LNG. The cost for coal fired power plants may increase as the global scenario is rapidly changing and we’re considering the safety of the environment.

Energy expert and the faculty of Petroleum dept. of BUET Professor Dr M Tamim presented the keynote paper at the seminar. He said that, fixing the energy prices in Bangladesh will get tougher in the future. Many factors including international market, subsidy, the usage pattern of energy resources, loan policy, overall improvement in efficiency etc likely has a direct impact on adjusting the price. So, predicting the price of the energy might appear as a challenging task for everyone. However, the price predictability is extremely important for Industries, especially for electricity, he remarked.
He said that, the government is on its way to 500 million cubic feet of LNG to meet mounting natural gas demand in local market. But, the costly LNG will increase the gas price by 2.5 folds and which will rise up to 3 folds in the next 10 years. However, increased efficiency in consuming and supplying the gas may help a lot to keep the price within mass people’s capacity.

He said that, captive powers should be brought down and they should be provided with grid electricity. He recommended some more points to increase the overall efficiency in the sector including reducing system loss to almost zero, reducing transmission cost, changing the usage pattern of fuel oil in the transportation sector, banning outdated and unfit cars and so on.

Professor Dr. M Tamim further said that, the fuel mix is the principal driving force behind electricity pricing, as energy prices have been lower than market prices aided by government subsidy (direct and tacit). “The energy price must reflect market price”, he added. The government must not control the market price of the energy at any situation. Rather, the government should provide the mass people with energy at market price by any means. Subsidizing the sector is the only constructive solution to the dilemma.
He also said that, the government should keep in mind the three key factors- economy of the country, environment and energy security while fixing the price of energy. The cost of power generation should be kept as low as possible. It is assumable that, the price of fuel oil in the international market is not likely to rise a lot in the next few years and we should bear it in our mind while designing our energy policy, he added.

Mizanur Rahman, the member of the Bangladesh Energy Regulatory Commission said that, primary energy directly controls the cost of power generation. But, the government must keep the price of energy as low as possible by providing a subsidy.

The Chairman of Power Development Board, Khaled Mahmud said that, initiatives are taken to enhance the efficiency of the power plants as outdated power plants are now being decommissioned.

Powercell Director General Engineer Mohammad Hossain said that the government should have control over the energy sector’s price to ensure energy security for all. If the government doesn’t control the price, it might rise a lot and create chaos in the sector.

Professor Shamsul Alam, advisor to the Consumers Association of Bangladesh (CAB) said that transparency should be ensured in the energy policy and then all problems will be resolved. He said that, the overall cost of living usually goes high by 20 percent once the electricity cost increases by only 5 percent, so the government should be careful while fixing the price of energy and power.

Dr. Golam Moazzem the research director of Center for Policy Dialogue (CPD) said that, there is a lack of efficiency in the management of the energy sector. Private sector entrepreneurs are getting so many exclusive facilities which if provided to the government-owned power plants would help a lot to reduce the price of power.

Imran Karim, vice-president of the Bangladesh Independent Power Producers Association, a private power producer’s organization, said that they are paying bills for the gas that they’ve never used. This happened due to the faulty meters and resulting in a huge loss in every month in all the industries using natural gas. He requested the authority to provide with appropriate meters for gas in the industries.